E-Verify is an internet-based system through which employers electronically confirm the eligibility of newly hired workers, after a person has accepted a job.(Photo: Natee Meepian/Getty Images/iStockphoto)

A dispute over immigration is at the crux of the government shutdown, but the impasse also has halted the E-Verify service run by the federal government that is designed to discourage the hiring of ineligible foreigners.

The shutdown doesn't appear to have disrupted hiring, but the impasse could become more of a problem if it extends much longer. It also is causing confusion among some employers, attorneys say.

Here's what's at stake:

What is E-Verify?

E-Verify is an internet-based system, authorized by federal legislation in 1996, through which employers electronically confirm the eligibility of newly hired workers, after a person has accepted a job.

Information submitted through E-Verify comes from personal information that an employee lists on a paper form called an I-9. Employers who want to do an E-Verify inquiry must initiate it within three business days of hiring someone.

E-Verify then compares that to records of the U.S. Department of Homeland Security and the Social Security Administration, with employers usually receiving a response within seconds — either confirming eligibility or pointing to the need for further information.

The E-Verify system is administered by the Social Security Administration and U.S. Citizenship and Immigration Services.

Without E-Verify, employers have a heightened risk of hiring ineligible workers, said Jodi Bohr, an attorney at law firm Gallagher & Kennedy in Phoenix. If they must later let these workers go, it could result in wasted expenses on training and other areas.

How widespread is E-Verify's use?

The system is mandatory in Arizona and seven other states. It's voluntary elsewhere. E-Verify is a "second layer of verification for an employee’s ability to work in the United States," said Julie Pace, an attorney at the Cavanagh Law Firm in Phoenix.

It supplements information that must be provided on Form I-9, which all employers in all states must use, she added.

Alabama, Mississippi and South Carolina also require E-Verify for all employers, while Georgia, Tennessee, North Carolina and Utah do so for larger businesses (six to 25 employees or more, depending on the state).

Also, federal contractors are required to use E-Verify, and roughly a dozen states including Arizona require it for state public contractors.

Arizona was the first state to require mandatory E-Verify for all employers.

Has the shutdown disrupted hiring?

"Our impression from the businesses we work with is that hiring activities are proceeding as normal," said Jennifer Ward, Arizona president of the Employers Council, a group that provides assistance to business members in employment law, human resources and other areas.

Hiring activity normally slows down anyway around the holidays, she noted, so the E-Verify disruption now might not be as big a deal as it normally would. Still, Ward said she hasn't heard of much confusion from businesses.

Katie Conner, a spokeswoman for Arizona Attorney General Mark Brnovich, said the office isn't aware of any confusion on the part of employers about E-Verify compliance during the shutdown.

She said the state Attorney General, as well as those for the various counties and other law-enforcement agencies, are charged with investigating complaints that an employer has knowingly employed an unauthorized alien.

However, Pace said she has received calls and email messages from employers asking how to deal with the E-Verify suspension.

Because E-Verify is a mandatory system in Arizona, businesses here face a somewhat heightened compliance risk that doesn't exist in most other states, Ward said. But she termed the risk as "minimal" given that the law historically hasn't received much enforcement from the state.

It's worth noting that not all employers comply with the program. "E-Verify compliance rates are very low," read a Cato Institute blog last year.

In the most recent period that the institute analyzed, the second quarter of 2017, only 56 percent of new hires in states with E-Verify mandates were run through the system.

The Arizona rate was slightly higher, 59 percent, according to the blog, which cited data from the Department of Homeland Security and elsewhere.

What should employers do?

With the suspension of E-Verify services, employers are not able to comply with the three-day requirement.

Nevertheless, "employers who must hire while E-Verify is out of commission are still required to verify employment eligibility," Bohr said. That means employers must complete Form I-9 within the required time frame.

Employers also should plan to use E-Verify to check on new workers retroactively after the shutdown ends.

U.S. Citizenship and Immigration Services said it will provide additional guidance to employers once the agency reopens.

What should businesses do in the meantime?

Legal experts say completing and filing the Form I-9 during the E-Verify program halt shows a good-faith effort to comply with the law during an unusual period.

"It's essential that employers continue to complete Form I-9 for all newly hired employees," Ward said.

One thorny issue arises for employees who have been listed as "tentative non-confirmations" — individuals who must provide additional information or risk being deemed ineligible and let go.

Sometimes, people receive this designation because they aren't U.S. citizens. But it's possible a clerical error such as an incorrect birth date in Social Security's database could trigger a TNC. "When something like this happens, the applicant has a certain amount of time to fix the issue," Bohr said.

Normally, employees have eight workdays to resolve a TNC situation, but that time frame has been suspended during the shutdown.

U.S. Citizenship and Immigration Services cautioned employers about firing or taking other adverse actions against employees with cases that haven't yet been resolved, according to an update by the Society for Human Resource Management.

Nor should companies stop hiring people simply because they can't be verified through E-Verify, the group said.